Prices climb in these low-income areas, though gains are uneven across regions
Home prices in many of the nation’s Opportunity zones continue to rise, indicating solid homebuyer interest even as economic challenges linger.
Opportunity zones encompass low-income neighborhoods nationwide where the federal government offers tax incentives to attract investment.
ATTOM’s report, which analyzed data from 3,857 zones, showed that median single-family home and condo prices rose from the second to the third quarter in 53% of these zones, and 61% saw year-over-year price increases. In nearly half of the zones analyzed, median home prices surged by over 10% compared to the previous year.
"Another quarter, another sign of rising fortunes. That again is the takeaway from home-price data inside neighborhoods with some of the most pressing needs around the country, marking just the latest indication of their economic potential," said ATTOM chief executive officer Rob Barber. "We keep seeing this over and over as soaring values push house hunters without a ton of resources out of pricier locations to more-affordable markets."
While some opportunity zones are benefitting from rising prices, a majority still sit below the US median price of $360,500. About 80% of opportunity zones recorded median prices below that level, with nearly half reporting medians under $200,000. Neighborhoods with homes priced below $125,000 saw annual price gains in only 48% of cases.
The report also revealed that the lowest-priced neighborhoods within these zones continue to experience slower growth. For example, zones where homes typically sold for less than $125,000 saw annual median price increases in only 48% of cases.
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In states with at least 25 opportunity zones and sufficient data, Nevada led the way, with 81% of its zones showing annual price gains. Wisconsin (75%), Indiana (72%), Ohio (69%), and Utah (69%) also saw increases. Meanwhile, Kentucky, Louisiana, Colorado, Arizona, and Oklahoma showed the lowest portions of price growth in their Opportunity Zones.
Most opportunity zones remain economically challenged compared to surrounding areas. The report found that median household incomes in 87% of opportunity zones were below the county medians where they were located, with income levels falling below three-quarters of county medians in 54% of zones. In 14% of zones, incomes were less than half of local county averages, illustrating the ongoing economic disparities in these areas.
"The situation inside opportunity zones still is far from rosy,” Barber said in the report. “Significant numbers still face depressed prices. But the latest big picture provides more evidence of home buyers interested in these communities, which can only be a positive lure for the investments that opportunity zone incentives are designed to attract.”
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